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Facebook issued 10-year bonds with a par value of $1,000 and a coupon rate of 10%, paid semiannually. The yield to maturity on this bond
Facebook issued 10-year bonds with a par value of $1,000 and a coupon rate of 10%, paid semiannually. The yield to maturity on this bond is 12%. I) What is the bond price? Is it greater or less than $1,000? (25points) 11) Suppose that the yield to maturity decreases to 9% because of the recent economic condition. What is the bond price? Does the bond price increase or decrease? (25points) III) Figure out the yield to maturity if the price is $1,100 for the same bond and the yield to maturity if the price is $900 for the same bond. (30points)
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